From recession risk to crypto winter, 2022 is about survival of the fittest
In a very stressful year, the 33rd annual Fortune Global 500 list tells a cheerful story. Our annual ranking of the world’s largest companies posted strong numbers: revenues for the group rose 19% year-on-year, and profits hit a record high of $3.1 trillion.
Here’s the catch: These numbers reflect the economy as of 2021, when the world began to recover from COVID-19. This year has brought a new truckload of challenges, and no one is celebrating. A recent one Fortune and Deloitte survey of CEOs found that 67% are “pessimistic” or “very pessimistic” about the outlook for the global economy over the next 12 months. That’s up from just 12% in January.
European business leaders have felt the pain longer than most. The Russia-Ukraine conflict is raging in their backyard, and they were hurting long before their American and Asian peers.
In her soon-to-be-published feature, Fortune‘s Vivienne Walt outlines the unprecedented conditions world leaders are navigating in. “Soaring demand from COVID has collided with skyrocketing fuel prices and transportation costs to create shortages and bottlenecks everywhere along the chain of global trade,” she writes. “And all this has been exacerbated by the growing strain of the Ukraine war – Europe’s deadliest conflict since World War II.”
Other CEOs have had to deal with difficult social and legal pressures. In a Fortune exclusively by Geoff Colvin, McDonald’s CEO Chris Kempczinski describes the months-long, highly scrutinized decision-making process that led the restaurant giant to close all 853 of its stores in Russia. The move affected 62,000 employees and essentially wiped out 7% of global revenue overnight. Kempczinski explains how he made the call.
For businesses of all sizes, the real test will be who can survive and thrive under tough conditions like these, especially if – or when – a recession of unknown length and depth hits. Some, like the world’s largest commodity traders, are likely to keep finding ways to record profits. Others will evaporate, as many Web3 startups have done in the “crypto winter.” Check out our cover story on crypto exchange FTX and its billionaire creator, Sam Bankman-Fried. Despite the downturn, he hopes to become the industry’s white knight. In the spirit of Warren Buffett (who is more than 60 years his senior), he is greedy when others are fearful.
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A version of this article appears in the August/September 2022 issue of Fortune with the headline “Survival of the fittest”.
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